The system of internal and external labor markets interaction formed in Soviet Union is characterized by high monopolization, soft budget constrains, government wage regulation, wide use of non-monetary compensation (fringe benefits), low labor mobility and high level company’s specific capital investments. As a result the economy has local internal labor markets which “tied” employees to the employers.
Due to toughening budget constraints companies was forced to optimize labor costs and to become more flexible. Gradually it leaded to changes of internal and external markets interaction. Internal labor markets became more open: labor mobility increased, specific capital investments declined, non-standard employment enlarged etc.
In addition, IT development and decentralization of process create the necessary conditions for joining together economic advantages of large enterprises (scale effect and competence) with small businesses advantages (freedom, creativity, flexibility). Bringing down transaction costs Russian companies tried to raise their flexibility and adaptability by organizational changes, job management, implementing new labor contracts etc.
As a result, the Russian labor market became to look more similar to most of developed countries markets with becoming more simple companies organization, declining stable employment and enlargement of temporary and unstable jobs. These processes were accompanied by changes of internal and external markets interaction and decline of internal market closeness.
The main purpose of the research was to determine the mechanisms and consequences of interaction between internal and external labor markets.
- We assessed contribution of different factors that determine Russian employers’ perception of the rigidity in employment protection laws as well as the influence of this perception on the choice of the mechanism of labor demand adjustment to the crisis of 2008-2009.
- We compared the status of real and potential minimum wage recipients and determine the differences in their employment compared with the core group of employees in the Russian market.
- We investigated the intensity and directions of internal labor mobility, the factors that contribute to employees’ ascent up the career ladder as well as the relation between changes in wages in a firm and in-house career development.
- We evaluated the interrelation between stability and mobility of labor contracts, trends in specific experience changes and investments in human capital. We determined the monetary return to employee’s external mobility.
- We estimated scale, dynamic and determinants of non-standard labor contracts use by Russian companies.
- We provided characteristics of the level and dynamics of job satisfaction in the Russian labor market and assessed the determinants of its influence on labor mobility.
- We investigated the effect of wage compression on firm’s training of employees;
- We assessed the impact of tobacco consumption intensity on wages and employment in Russia.
The researches were discussed at scientific conferences and seminars and were published in reviewing economic journals and collections. The political recommendation for labor market and social security were developed on the basis of conducted studies.
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